The output activity and business perspective

The "activity" word is used in this manual as a preview to cover any operation that takes place in a company. In a company that provides bus transportation for school activities include bus routes, bus cleaning, take the phone to check the routes and schedules of calls and ensure that the administrative requirements, such as insurance and the licenses are in place. In support of the NGO department for the elderly, activities include sending home help, the house payment assistance, call customers organize tours and verify that the expenditures in the budget permits. In a manufacturing company to offer floor cleaning machines activities include ordering parts, assembly parts, delivery stores to sell finished products, which returns for warranty repair, payment of employees and check the quality of goods produced. These are all the activities and make all the costs incurred. The costs of activities that cause is at the heart of most of the costs of collecting the partition and expenses related to a specific activity.

You can find some time the term "costing" Activity was established to recognize that management accounting is most effective when the costs to business of the company is bound.

Activities must be measured. Soft drink manufacturer for the measurement of the activity is the number of cases of soda sold. For a retail store could be the number of sold items of clothing, or it could be the value of sold clothes. The sale of a large number of low value items causes the increase in personnel costs makes the sale of a small number of high value items. For freight transport company by the activity measurement of the road could be conductors hour or the number of kilometers of work. Hours worked do not consider if the drivers are on the road or waiting at the station. Distance in miles traveled are a better measure of productive activity, but do not distinguish full loads of empty trucks. Fuel costs are higher for full charge of an empty truck.

Activity may be measured using a combined kg-mile drive. Throughout the following chapters the word "activity" is used and activity measurements will be described. Are expected to demonstrate their analytical skills in thinking about the meaning of and relevance of the measurement of the classification of activity costs and cost behavior.

The output is a particular type of activity. It is the product or service provided by the company or any of its internal sections. The output of a soda manufacturer is soft drinks; the exit of a retail store is sold garment. Outputs are directly proportional to the activities. If we have some work to do, there must be a way out. However, no relationship between the activity and the standard output. If the report is not correct, the company will lead to a loss.